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BUSINESS OR GAIN

12 September 2007

I AM AN INVESTOR, THE ITO SAYS NO IT IS BUSINESS. YOU GET YOUR ACCOUNT AUDITED AND FILE BUSINESS INCOME NOT LTG, STG. NOW WHAT TO DO FOR STT PAID BY US ON TRANSACTION OF FUTURE OPTIONS, SHARES AND DERIVATIES.

SHALL I KEEP STT RECORDS SEPARATE FOR FUTURES, STG, LTG OR NOT. PRACTICALLY ITS LONG ACCOUNTING AND TURNOER MAY BE APPROX 15 CRORES FOR JUST 2 LACK GAINS.

SHALL I CALCULATE THE STT PAID AS ADANCE TAX

WHAT AMOUNT PAID ON TRANSACTIONS OR

ELIGIBLE UNDER 80E OR ANY OTHER

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4 Replies

Nitesh (Chartered Accountant) (340 Points)
Replied 12 September 2007

sir eligible for rebate under section 88 E for all the STT paid during the year

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Late CA Sampat Jain (Chartered Accountant) (4772 Points)
Replied 12 September 2007

Rebate in respect of securities transaction tax. 88E. (1) Where the total income of an assessee in a previous year includes any income, chargeable under the head “Profits and gains of business or profession”, arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income-tax on such income arising from such transactions, computed in the manner provided in sub-section (2), of an amount equal to the securities transaction tax paid by him in respect of the taxable securities transactions entered into in the course of his business during that previous year: Provided that no deduction under this sub-section shall be allowed unless the assessee furnishes along with the return of income, evidence of payment of securities transaction tax in the prescribed form59: Provided further that the amount of deduction under this sub-section shall not exceed the amount of income-tax on such income computed in the manner provided in sub-section (2). (2) For the purposes of sub-section (1), the amount of income-tax on the income arising from the taxable securities transactions, referred to in that sub-section, shall be equal to the amount calculated by applying the average rate of income-tax on such income. Explanation.—For the purposes of this section, the expressions, “taxable securities transaction” and “securities transaction tax” shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.]

Tamilarasi (Student) (36 Points)
Replied 17 September 2007

Carry forward Business or profession losses can be set off against Speculation profit?

Nilesh2006 (17 Points)
Replied 17 September 2007

Sir ITO has a right to treat Whether it os a business income or LTCG/STCG. It depends upon the volume of transaction traded during the yea. If you are doin daily trading then it will come under the Head Business in nature of Speculation If you are not doing Day Trading then, the ITO can see the number of transactions taken place during the year and the frequency of such transaction Further if he says that it will be treatedv as business income then you can claim all expenses incurred u/s 28 of the incometax act in calculating Business Income